Predatory-Lending Loopholes Closed

The White House and Pentagon unveiled July 21 a plan that would close loopholes predatory lenders use to lure service members into unmanageable debt. President Obama announced the new policy in a speech to the Veterans of Foreign Wars National Convention in Pittsburgh. “There’s already a lot to protect our troops and families against unscrupulous predatory lenders, but some of the worst abusers — like payday lenders — are exploiting loopholes to trap our troops in a vicious cycle of crushing debt,” Obama told the convention. Changes include:
*      An annual percentage rate limit of 36 percent.
*      Tighter rules regarding mandatory arbitration and coercion of service members to waive their rights under the service members’ Civil Relief Act.
*      Changes to the definition of credit to make any closed or open-ended loan subject to the regulation changes, except in cases where loans are secured by real estate or purchase-money loans.